Professional Documents
Culture Documents
Improving HRM Capacity
Improving HRM Capacity
Dr Stephen Bach
Senior Lecturer, The Management Centre,
Kings College, University of London
Dr Stephen Bach is Senior Lecturer, The Management Centre Kings College, University of London (Franklin-Wilkins Building, 150 Stamford Street, London SE1 9NN
Tel: +44 (0)20 7848 4090; e-mail: stephen.bach@kcl.ac.uk) His research interests
include human resource management and the reform of employment practices in
the public sector. His most recent books include Personnel management: a comprehensive guide to theory and practice, 3rd edition, Oxford: Blackwell, 2000 (jointly
edited with K. Sisson) and Public service employment relations in Europe: transformation, modernisation or inertia, London: Routledge, 1999 (jointly edited with L.
Bordogna, G. Della Rocca and D.Winchester). He has acted as a consultant to the
International Labour Office, the World Health Organisation and the British governments Department for International Development.
Contents
Introduction ........................................................................................................................ 1
Health Care Reform, Human Resources and the New Public Management ...................... 2
Human Resources: From Neglect to Valued Asset? .......................................................... 3
The contribution of human resources ................................................................................ 3
Models of HR practice ....................................................................................................... 4
Developing a Strategic Approach for the Health Sector ..................................................... 5
Ownership ......................................................................................................................... 5
External fit ......................................................................................................................... 8
Internal fit ........................................................................................................................... 9
The Specialist HR Function ............................................................................................. 12
The contribution of the HR function ................................................................................. 12
Role of line managers ...................................................................................................... 12
Delivering specialist services ........................................................................................... 13
Conclusion ....................................................................................................................... 14
References ...................................................................................................................... 15
Appendix 1: The content of health care reform: implications for HR ............................. 22
Appendix 2: The process of health care reform: implications for HR ............................ 23
Appendix 3: Linking HR and business strategy: the HRM model ................................. 24
Appendix 4: A typology of nursing-home work and care organisation for nurse aides .. 25
Appendix 5: Hospital mission in France: A charter for hospital patients ........................ 26
Appendix 6: Approaches to merging strategic and HR planning .................................. 27
Appendix 7: The UK NHS plan core principles .......................................................... 28
Appendix 8: Approaches to developing competencies: advantages .................................
and disadvantages ................................................................................... 29
Appendix 9: Disenchantment with health sector rewards and employment
conditions in the Caribbean ...................................................................... 30
Appendix 10: Myths that keep HR from being a profession ............................................ 31
Appendix 11: Definition of HR roles and key competences to fulfil these roles .............. 32
Appendix 12: Pros and cons of devolving HR to line managers ..................................... 33
Appendix 13: Hard and soft measures of HR effectiveness ........................................... 34
Appendix 14 Strategic HR Audit: Questionnaire ............................................................ 35
The HR function
Developing HR capability requires investing in the training and development of both HR
specialists and line managers/professionals with staff management responsibilities.
It is vital that any investment in specialist HR capacity evaluates the different ways to
deliver the HR function. Even if outsourcing is rejected the in-house HR function should be
properly audited and monitored.
To be effective the HR function must develop both an operational and a strategic HR capacity. The HR function should not try to run before it can walk robust HR policies and
practices should be developed before attempts at devolution or more radical changes in
employment practices should be pursued.
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Introduction 1
Across the world policy makers confront great uncertainty about the future for health care systems and
the scope to reform them effectively. The 1990s were characterised by unprecedented interest in health
system reform, but by the end of the decade it was clear that the high expectations of reformers had rarely
been fulfilled. In the OECD countries the internal market reforms of Britain and Sweden were in retreat
and the fragmented US health care system remained substantially unaltered. In Eastern Europe and Central Asia forms of privatisation and revamped health insurance systems have so far not been able to turn
round deteriorating health systems (1-2). In many developing countries measures to decentralise health
systems have taken place in a context of structural adjustment programmes, exacerbated by the problems
of HIV/AIDS.
The reform of health service employment conditions remains a sensitive issue. As the Director General
of the WHO commented, dealing with issues such as pay and incentives in the public sectorconstitute
some of the most challenging items on the international health agenda (3). It has become increasingly
recognised that poor human resource management practices remain a dominant constraint on the reform
of health services (4). The legacy of insufficient attention to HR is all too evident; the majority of countries have problems with shortages, misdistribution and poor staff utilisation that often co-exist with
problems of chronic over-supply (5-6). Even if countries possess sufficient numbers of staff they are
often utilised ineffectively because they lack appropriate skills (e.g. in public health) or are concentrated
in urban areas leaving rural areas poorly served. Honduras provides one such example (7). These HR
problems reduce service effectiveness resulting in health services being ranked as the least efficient
public service, according to a World Bank survey of government services in developing countries, using
industrialists as respondents (8).
The almost universal reforms of health systems that were unleashed in the 1990s have raised many new
HR challenges. In a labour intensive human service industry the quality of service is intimately linked to
the skills, motivation and commitment of the staff providing that service. Although reforms of heath
services have been badly needed, they have often been accompanied by reductions in staffing levels (911). The uncertainty and more intensive working patterns associated with the reform process have frequently impacted on staff morale. At the same time, however, decentralisation and forms of marketisation
require the development of new competencies and more sophisticated HR management. Moreover, the
management of the workforce has become more complex arising from the growth of atypical employment and greater competition for staff such as nurses, as alternative employment opportunities for women
have expanded (12).
This paper is divided into four main sections. The first section examines the broader context of public
sector reform and draws out the implications of health reform for HR practice. The second section
considers the contribution that HR can make to improved health sector effectiveness. The main section
of the paper considers how a more strategic approach to HR can be developed in the health sector,
drawing on the existing evidence base, and emphasising the importance of ownership, external fit and
internal fit. The vital role of the specialist HR function, and the different ways in which HR services can
be delivered and audited, comprises the final section, prior to a brief conclusion. This paper touches on
many areas considered more fully in other papers. In these cases (for example, rewards, performance
management) developments are noted but not discussed in any detail.
I should like to thank James Buchan (WHO) and David Winchester (University of Warwick) for their comments on
an earlier draft of this paper.
Health Care Reform, Human Resources and the New Public Management
In many countries health care reform has taken place against a background of substantial political and
economic change. A WHO sponsored survey of 18 countries HR strategies suggested that each countrys
particular political and economic circumstances had an important bearing on HR policy (13). For example, in countries such as Angola and Cambodia continuing political and economic uncertainty has led
governments to focus on minimum HR requirements that will enable more fully developed HR policies
when political stability returns.
These differences highlight issues about whether management practice in the public sector has started to
converge around a new public management, as some commentators have suggested (14). Although not
amenable to precise definition, it has been associated with a plea that the public sector should mimic
best practice in the private sector. New public management places great emphasis on accountability for
results, with the development of a cadre of professional managers that are forced to compete for resources from government or donor organisations (15). It has also been associated with measures to aid
policy delivery. By separating the formulation of policy from its implementation, with the creation of
separate business units measured against clear targets, greater clarity and expertise can be developed in
both policy formulation and delivery. Nonetheless, new public management reforms require sophisticated capacity to develop targets and to enforce them through contractual means, expertise that is not
well developed in many countries (16) and which may account for its modest impact in less developed
nations (17). In Europe, the experience with developing and implementing new public management
reforms has been more uneven than is often suggested (18).
Despite these uncertainties there remains substantial agreement on the main themes arising from the
health care reforms of the last decade (19-21) Although often conflated in practice, for analytical purposes a distinction can be drawn between the content and process of health care reform. This allows the
implications for HR to be drawn out more fully and the scope for policy interventions to be made more
explicit. In almost all countries the content of health care reform has involved a mixture of: altering the
role of the state, decentralisation, a greater emphasis on primary health care and, to a lesser degree, the
empowerment of users (see appendix 1).
If the main strands of health care reform are well known, the consequences for human resource management are rarely considered in a systematic manner. Appendix 2 illustrates the process of health care
reform with top-down, big-bang (22) approaches the most prevalent. Although the process of reform
can have an important bearing on the outcomes of the reform process it has been subject to much less
attention and many of the issues examined in appendix 2 are implicit rather than explicit within the
reform process.
An important lesson is that health reforms are frequently devised separately from human resource management policies and from broader processes of civil service reform. This divorce results in the implications of health reforms for HR policy not being considered until the end of the process or plans developed that cant be implemented because the Ministry of Health has neither the capacity nor the influence
to make them happen. Insufficient attention has therefore been given to whether the management capacity and influence exists to implement reforms. An unfortunate side effect is that a gap emerges between
espoused policy and actual practice (because of implementation problems) leading to cynicism and eroding support for change. In summary, policy analysis often focuses on the technical elements of reform
without sufficient attention being given to implementation issues; especially the specific institutional
and contextual factors that facilitate or constrain reform.
By contrast in recent years it has become commonplace for organizations to suggest that human resources are their most important asset. Whether termed human resource management (HRM) or high
performance management the novelty of these approaches is that they emphasize pursuing a strategic
approach to the management of people. This involves developing a coherent human resources approach
with the full backing of senior management and with a tight coupling between human resources and
business policy. HRM comprises a particular high commitment route in which there will be organizational pay-offs if specific configurations of personnel policies are adopted. These policies aim to: secure
the commitment of the workforce; ensuring highly flexible and innovative working practices; and establishing a high quality of work by developing a skilled workforce (27-8). Many commentators suggest
that a positive link exists between the establishment of sophisticated HR architecture and a firms financial performance (29).
This emphasis on adopting a more strategic approach to HR reflects a developing consensus that human
resources are the key source of competitive advantage because it is the skills, behaviour and values of
staff that are paramount in sustaining high performance
(30). This insight has been associated with the resource-based view of the firm in which it is suggested
that successful firms are those that systematically identify, use, develop and renew their core competencies (31).
Models of HR practice
The resource-based view has influenced a number of models that try and demonstrate how a strategic
approach to HR can be translated into a set of coherent HR policies. There are two broad approaches
(32). First, universal models imply that they there is one best way for achieving high performance
regardless of the context or specific circumstances of the firm. Second, contingency models link the
human resource management policies adopted by the organisation to the particular aspects of the business environment. The universal models vary in their emphasis but they all put a premium on ensuring
that HR policies are meshed together coherently and reflect the requirements of the external business
environment (see appendix 3). The type of policies the HRM approach incorporates is shown in table 1.
By contrast the contingency models link HR policies to the particular circumstances of the organisation.
Some models emphasise that it is the stage of the organisations life cycle (start-up, growth, maturity)
that should determine HR policy whilst others focus on the characteristics of the firm whether a single
product firm or a highly diversified business. Finally, whether a firm is competing on the basis of cost,
quality or innovation has also been associated with particular HR strategies.
Table 1: Seven dimensions of HR that produce profits through people
1. Employment security
2. Selective hiring of new personnel
3. Self-managed teams and decentralization of decision making as the basic principle of
organizational design
4. Comparatively high compensation contingent on organisational performance
5. Extensive training
6. Reduced status distinctions and barriers, including dress, language, office arrangements,
and wage differences across levels.
7. Extensive sharing of financial and performance information throughout the organisation
Source: Pfeffer, J. 1998: 64-65 (30)
This type of contingency approach has been applied to health care settings. Eaton examines the patterns
of HR policy and patient outcomes associated with three different types of work organisation amongst
nurse aides in the nursing-home sector in the USA (33). Using the same type of approach as the contingency models, particular forms of business strategy (models of care) were linked to specific HR policies, suggesting that managers could exercise a degree of strategic choice in the approach adopted.
Different HR approaches were associated with very different levels of performance in terms of the quality of patient outcomes (appendix 4).
Ownership: people are regarded as a strategic resource to be nurtured and developed with top managers that support such an approach. There is clear leadership of the reform process with sufficient HR
capacity to maintain the momentum of reform.
External fit: organisations with an effective approach to HR are alert to the external environment,
planning their HR requirements in a manner that incorporates the HR implications of a changing external
environment and able to modify the strategy or resolve the problems arising from any environmental
changes.
Internal fit: refers to a coherent approach to HR policy which is not over-reliant on one element (e.g.
training) but combines HR policies into an integrated bundle of policies and processes.
What is the evidence about the adoption of such approaches within the health sector and what improvements could be made to existing practice?
Ownership
The evidence suggests that ensuring the importance and ownership of HR within the health sector remains a major challenge. It is at national level that Ministries of Health are expected to lead health
reforms, including HR activity. In many developing countries HR activity is located within a specific HR
unit within the Ministry (35). The difficulty is that many of these units are not staffed by HR specialists
and they tend to concentrate on issues of personnel administration and training. This operational focus
can contribute to the sense, as in the case of Colombia, that the Ministry forms part of the problem rather
than part of the solution and this weakness prevented it from building consensus for reform with other
stakeholders (employer and union representatives) (36). For this reason it is important to establish a
specialist and independent HR capacity at central level to flesh out detailed plans because this is the best
means to implement unpopular changes (37).
Moreover, if at Ministry level there is a failure to invest in HR expertise, it undermines the message that
HR issues are important. In the United Kingdom radical attempts to alter HR policy in the early 1990s, as
part of the establishment of an internal market, floundered because the Ministry of Health provided little
concrete support and guidance to local trust hospitals about how to implement HR strategies. This made
local managers cautious about reforming employment practices because they believed that they were
receiving mixed messages about the priority attached by the government to the reform of employment
conditions (38). These difficulties place a premium on investing in HR capacity at central level, including top level board representation for HR specialists, which has been shown to increase HR credibility
and foster a tighter link between HR policy and business strategy (28).
These problems of central capacity can be exacerbated by the undermining effects of constant change
amongst senior staff. Accounts of transformational change in successful organisations are peppered with
references to strong leaders and the emphasis placed on developing the next cadre of top managers (39).
The health sector, particularly at central level however, is subject to political fluctuations in which there
may be frequent changes of personnel due to political upheaval (40) and the allocation of senior roles on
the basis of patronage. This discourages a longer term perspective, erodes organisational memory and
expertise, reducing the capacity to implement reforms.
So far the discussion has presupposed that the HR strategy is owned by the Ministry of Health. This
assumption, however, ignores the extent to which ownership of HR issues is diffused amongst many
different actors. Because HR policy invariably has paybill implications the Ministry of Finance takes a
close interest in HR matters, as do other government departments. HR policies will only be effective if
there is agreement and co-ordination at central level. In addition to the need to improve co-ordination
with government departments, the role of the private sector and educational institutions needs careful
consideration to ensure sector wide ownership of HR. This is not straightforward because the interests of
educational institutions, for example, may clash with those of government. In Peru, private and loosely
regulated educational institutions are creating an over-supply of physicians; an issue that has not been
adequately addressed by the state even though it exacerbates existing problems of staff utilisation and
deployment (41).
Other key stakeholders also need to be involved. Although there is often a reluctance to include trade
unions, their exclusion can store up problems for later. For example, in Costa Rica a relatively closed
policy making process, at the behest of the World Bank and Inter-American Development Bank,
marginalized union involvement and led to incoherent HR policy. Similar problems have been highlighted in Fiji and Guinea-Bissau. By contrast widespread consultation with stakeholders in Angola and
Botswana facilitated a greater sense of ownership (13).
Strengthening HR ownership. Several interventions can ameliorate the problems of HR ownership. The
importance of a clear vision, which reflects the overarching view of where the organisation is heading,
and a mission statement that puts in more concrete terms the key ideas that guide the organisation have
been recognised as central to establishing a strategic approach to HR. In many countries there are forms
of hospital charter that reflect the key mission of public hospitals, as for example in France (see appendix
5) (42). This type of statement, however, is only of value if they it is developed in co-operation with staff
and taken seriously by managers. This is more likely to be the case when the mission statement is integrated with training and performance management systems.
Below Ministry level, at district or hospital level, many of the same issues of HR ownership and leadership arise. An important issue is the involvement of clinical staff which has become more pressing as
decentralisation increases the role of professional staff in HR matters. It is crucial therefore that clinical
staff receive training and support to build up their knowledge and understanding of management issues.
Ambivalence towards such developments and other forms of best practice (e.g. teamworking) has led
to suggestions that the management of culture and values is an integral part of the new HRM (see appendix 3). The argument is that improved organisational performance results from the development of explicit corporate values that guide behaviour (43). The evidence suggests that within the health sector
caution needs to be exercised. Health workers have highly developed professional values and there is a
danger that attempts to manipulate the culture can easily back-fire and be treated with cynicism. As
health workers appear especially hostile to managerial reforms that may undermine an existing public
service ethos (44) it is more fruitful to gain ownership for HR policies by focusing on behaviours and
competencies rather than trying to alter core values.
The evidence suggests that three main factors will influence employees willingness to change their
behaviour and consequently their capacity to own the HR agenda. First, the further that new behaviours
are distinct from the old ones the more threatening and uncertain are likely to be the reactions of staff. In
the UK the pressure on doctors to take on budgetary and staff management roles led to considerable
resistance because these responsibilities were radically different from those that clinicians had been
expected to undertake in the past. In addition, without training and support, staff at hospital level may
lack the confidence and experience to take on additional HR responsibilities as the experience of Hong
Kong indicates (45).
Second, the degree of transparency and the simplicity of HR changes is an important influence. Organisations that are able to communicate the key messages of their HR strategy and ensure that individuals
understand how their role fits into wider organisation objectives have more success in managing change
(28). The complexity of the health sector with many stakeholders and multiple competing objectives that
are not easily measured makes this a difficult task. In addition, the political character of health care
organisations with informal alliances and trade offs between different objectives make policy makers
understandably hesitant about revealing these political compromises. Inevitably clear priorities suggest
that other objectives are less important, which may antagonise powerful groups and vested interests (46).
Nonetheless, innovative organisations have the maturity to debate their priorities, making decisions explicit and converting them into measurable targets. This type of approach has been adopted by the WHO
in its Health 21 programme in which HR forms an important component of the initiative (47).
Third, in any change process there will be winners and losers. Not surprisingly the extent to which
people will embrace change is influenced by their perception of whether they have gained from the
change process. In the Czech republic, for example, physicians expected that privatisation would boost
their incomes (48). In general, however, a key lesson from health care reform is that in many countries
too many influential stakeholders believe rightly or wrongly that reforms will have a detrimental
effect on their status, working conditions and pay (11). There is also considerable unease that the commercialisation of health services is placing financial considerations before patient care, fuelling industrial action, for example strikes amongst nurses in South Africa (49). These concerns are reinforced by
governments that are unable to provide sufficient resources to implement the reform agenda (e.g. Zambia) (16). The experience of successful HR change, however, suggests that policy makers need carrots to
offer staff in order to be able to pay for change.
External fit
The second key component of developing a strategic approach is a planning framework that enables
alignment between HR and the external environment. This ensures that the organisations policies support the behaviours and competencies required for it be effective. The focus of most attention is usually
an HR audit and HR plan because without some knowledge of existing HR resources and future requirements, it is difficult to know whether HR capacity can fulfil the needs of the business plan (health plan).
In the health sector, the WHO has examined existing HR resources focusing on the medical and nursing
workforce. The state of nursing and midwifery was investigated following the passage of World Health
Assembly resolution 45.5 in 1992. This resolution addressed the problems of nursing and midwifery,
especially staff shortages. A survey that examined the implementation of this resolution painted a mixed
picture on responses to shortages, with the greatest attention being focused on improving educational
programmes. Only half the countries responding had a written national action plan for nurses with a
lower figure for midwives (39 per cent) (50).
This situation reflects the generally very patchy picture of HR planning. Few countries have formulated
a comprehensive national HR development plan (see the experience of the Caribbean countries). This
problem is compounded by the lack of a database on existing skills in the health sector (51). This picture
is perhaps unsurprising because there is a limited tradition of effective planning and strategy development (52). Even if a HR strategy exists too often it has been discredited by being a top down, formulaic
planning ritual using inaccurate and dated information with HR considerations isolated from health
policy issues (see appendix 6 (53). Nonetheless the near universal attempts to reform the health sector
provide an opportunity for policy makers to use the objectives of reform (table 1) to develop a more
strategic view of health services, including at the same time the implications for HR, formulated in clear
and measurable HR plans.
This has been the approach of the British Government which has recently published its revised strategy
for the NHS which sets out its core principles (appendix 7). Importantly this strategic plan does not
simply quantify the goals of the organisation and the number of staff that it believes will be necessary to
achieve these aims, important as this is, but it also outlines in qualitative terms the expectations of staff
(54). The HR components of the plan are integral to it not a separate add on component. To ensure that
local employers take their HR responsibilities seriously the government has included the way that employers treat their staff as a core component of the performance framework; linked to the financial
resources that hospital trusts receive. For example, each employer is to be assessed against a Improving
Working Lives standard that will assess the organisations training record, sickness and safety performance, approach to discrimination and the like.
The UK approach takes a broad perspective that emphasises the impact of HR strategy on customer
service, investors and employees; mirroring a balanced scorecard type approach (55). This is in contrast to most of the evidence in the health care sector in which HR strategy is defined narrowly in terms
of workforce supply and demand issues (e.g. Eritrea) or attempts in Greece to establish a register of all
nursing personnel and to predict future workforce requirements (56-7). These efforts are a necessary but
not a sufficient condition for developing HR capacity.
First, the focus of analysis tends to be the occupation, especially doctors and nurses. This not only
ignores many other healthcare occupations, but planning on this basis assumes relatively fixed roles for
staff. As discussed below, competency based approaches which focus on the behaviours required of staff
rather than existing professional roles, may increase the flexibility and thus the capacity of the workforce.
Second, numbers orientated workforce planning methods leave key questions about the distribution,
qualifications, motivation, development and performance of staff unexplored. Finally, the issue of whether
adequate measures exist to forecast the numbers of staff needed given that staff roles in health services
are changing and that the process of globalisation is expected to increase health sector mobility remains
an unresolved issue (58). It is for these reasons that many organisations whilst maintaining a systematic
approach to human resource planning are moving away from an emphasis on quantitative techniques
(59).
A final issue in terms of integrating HR policies to health policy requires more detailed and explicit
consideration of key health trends that are not included sufficiently in the planning process, even though
scanning the environment is a central component of ensuring external fit. A number of sensitive issues
may not be factored into HR plans. For example, the growth of HIV/AIDS has considerable implications
for the availability of health personnel in many countries and the type of services that will need to be
provided. It may be politically too sensitive to incorporate accurate forecasts of HIV/AIDS despite its
consequences for HR. Private practice raises different issues. In many African and other countries professional staff carry out private practice to boost their salaries, even though it has an ambiguous status
(60) and may compromise their public sector work, as noted in the Caribbean (51). Nonetheless, the
failure to incorporate private practice and the activities of NGOs into an analysis of HR requirements
will reduce the credibility of HR planning.
In summary, the key lessons are simple. Health policy goals have to be translated into operational plans
if there is to be a strategic approach to managing HR; people undertaking this task need to have sufficient
influence to ensure plans are taken seriously and implemented to prevent the Strategic Plans on Top
Shelf (SPOT) trap (53). Indeed if senior policy makers and managers really believe that HR is fundamental to organisational effectiveness they will be involved in developing HR plans and capacity at the
same time as they develop health policy rather than the former being downstream of the latter (32). It is
for these reasons that issues of fit are central to building HR capacity.
Internal fit
As well as the need to align health policy and HR policy (external fit) there is also the need to ensure that
personnel policies are internally consistent (internal fit). The widespread use of competency frameworks
are one means to ensure that the requirements of the HR strategy can be linked to the specified attitudes
and behaviour of staff. These standards are then incorporated into all aspects personnel practice (recruitment, appraisal, training etc). The appeal of the competencies approach is that it provides a currency to
describe and link personnel practices that have often been characterised as a set of disparate activities
with little cohesion. There are a number of different types of competency framework that have been
developed [appendix 8 (61)].
Within the health sector the competencies based approach is most prevalent in the industrialised countries and has been applied particularly to leadership positions. In Sweden, for example, case study evidence from a number of clinics emphasised the central role that competency based management development played in improving leadership skills and enhancing employee attitudes to change (62). Other
studies have asked nurse managers to rank the behaviours of health executives that they found most
helpful in supporting organizational change with frequent communication about transition plans and
commitment to quality of care ranked highest (63).
Competency based approaches, despite their potential to provide the glue in complex organisations, are
not without their critics. First, competency frameworks are often viewed with suspicion by professional
staff that wish to retain a monopoly of expertise and are reluctant to accept new categories of health
worker. Competency approaches by emphasising behaviours rather than qualifications can break down
the barriers between occupational groups and encourage cross-functional working. Professional resistance, however, can be exaggerated as over time attitudes appear to change and medical staff are more
willing to delegate work to nurses, as appears to be the case amongst general practitioners in Britain (64).
A lot depends on the structure of incentives that can facilitate or hinder changes in behaviour.
Second, competency approaches have been criticised because they focus on what people can do rather
than what they know. Based on Australian experience, it has been suggested that competency frameworks reduce the importance of the learning process and do not equip staff to be problem solvers (65).
In practice, considering that in many parts of the world training and development activity has been
inadequate and focused on narrow technical skills, for example, in Central and Eastern Europe (66),
competency based approaches can make a valuable contribution to reducing the gap that frequently
exists between the output of educational and training institutions and the needs of the health sector as, for
example, in the Philippines (67).
Recruitment and selection. Cohesive HR policies are heavily dependent on effective recruitment and
selection practice. A number of difficulties have been highlighted in the literature. First, decisions about
recruitment and selection are often handled by a central government body using standard staffing ratios
that are often poorly linked to local service requirements. Policies that decentralise service provision
whilst retaining central control of staffing add to these problems. Poor distribution of staff can result, for
example in Tanzania, because recruitment and allocation decisions are based on political influence rather
than linked to workload (40). These difficulties can be exacerbated by the poor links between recruitment requirements and training outputs; graduates in Nepal and Indonesia have to wait months or years
before they can take up posts (35).
Second, selection procedures very often part of a formalised recruitment process for the whole civil
service in which formal exams are set that have little relevance to the particular jobs undertaken. In
Honduras, selection is based principally on medical qualifications. Candidates are rarely interviewed
and management skills are not considered (7). Similarly in Spain, selection examinations are heavily
weighted towards legal matters of questionable relevance (68). This type of cumbersome recruitment
process has encouraged forms of backdoor recruitment to allow more flexibility and autonomy in recruitment matters; encouraging the growth of temporary employment (69). The difficulty is that it encourages a haphazard increase in staff levels, with staff on different terms and conditions of employment, often with little legal protection. The recruitment of temporary staff may be a logical component of
an HR strategy but it should not be used to circumvent cumbersome recruitment and selection regulations.
Instead, especially in countries that are decentralising management practice in line with the precepts of
the new public management, employers have been granted increased discretion over recruitment and
selection. This encourages staffing patterns linked to local requirements, increases the authority and
accountability of local managers and streamlines the process. This does not mean that local managers
should have a completely free hand to recruit; the process must remain within a clear HR framework, but
it does allow discretion to move beyond the internal labour market and recruit externally which can boost
the quality of applicants [e.g. Kenya (70)].
A related issue is the criteria used to select staff. Innovative organisations use targeted selection methods
driven by their competency framework. In the health sector this approach has been translated into a more
critical approach to standardised tests that cannot detect competencies such as organisational commitment or communication skills. Coupled with problems of recruitment and retention it makes sense to use
10
more flexible recruitment and selection methods. For example, in the United States, many states including Connecticut, Indianapolis and Virginia have largely dispensed with written tests for recruiting many
welfare staff and use experience, references, work samples and interviews as the main selection techniques (71).
Performance management and rewards. The management of these issues and the outcomes in terms of
working conditions present some of the greatest challenges to policy makers in the health sector. The
criticisms of employment conditions in the Caribbean are illustrative of these difficulties (appendix 9).
The problems can be stated bluntly: salaries have in general been eroded in recent years, performance
expectations are under-developed, and pay determination arrangements are often inappropriate focusing
almost exclusively on seniority with no link made between rewards and performance (11). These points
can be briefly developed here.
Although it is very difficult to generalise, salaries are relatively poor, especially in developing countries.
This has encouraged staff to supplement their meagre incomes by private practice, with detrimental
consequences for public health services; a practice that many governments have condoned because it
takes some pressure off them to raise public sector salaries (72). Low salaries arise not only because of
the universal constraints on the public sector paybill, but also because health sector pay determination
arrangements are frequently incorporated within wider civil service pay systems. One possible solution
has been to break the link between health sector and civil service wage setting (for example, in Ghana)
increasing wage dispersion. Staff may be reluctant, however, to transfer onto different employment contracts because of the benefits of civil service employment (for example, pensions) as noted in countries
such as Zambia (73).
Different approaches to reform are influenced heavily by the characteristics of existing pay determination arrangements, not least the degree of centralisation and decentralisation, as the case of Europe
demonstrates (74). Although it has become very fashionable to advocate more decentralized systems of
pay determination there are considerable risks involved in such an approach. There is the requirement to
invest in considerable HR capacity and the danger that far-reaching reforms of pay systems may have the
opposite effect to that intended by demotivating staff as experience from both industrial countries (for
example local pay in Britain) and developing countries (e.g. The Phillipines) suggests (37-38, 75). The
important lesson is that systems of health service pay determination are highly resilient to change because of managerial conservatism, trade union opposition and the cost implications of pay reforms. It is
striking, however, that significant changes in employment practices can be introduced (performance
management systems, working time changes, alterations in work organization) within a national pay
determination framework as long as managers have some local flexibility (76).
Too much emphasis has been placed on the need to reform pay systems and pay levels of health service
staff and insufficient attention has been given to the equally important issues of improving non-pay
benefits and working conditions. Appendix 9 provides illustrations of these problems, suggesting that
addressing issues of career structures, working conditions and working hours could have a crucial bearing on improving the performance and morale of health care staff. Rewarding good performers through
promotion, more responsibility and incentives such as attending conferences and making space for research has been one such approach (70). In industrialised countries the promotion of family-friendly
working practices has also been a prominent recruitment and retention strategy. Performance appraisal
systems also have an important role to play in ensuring that staff are aware of the expectations of them
and that transparent promotion criteria are developed. Performance appraisal also forms an important
component of the overall HR strategy because it provides important information for HR planning and
training purposes and can also help communicate key messages (77).
11
12
unit to local HR specialists. Because HR responsibilities form part of every managers job, devolution
allows greater ownership of those decisions and enables them to be tailored to local circumstances (32).
It also reinforces the trend towards health service decentralisation, noted earlier.
Nonetheless dangers exist. First, it is inadvisable to devolve HR activities until formal personnel practices and procedures have been developed, which employees understand and accept. If personnel policies are not in place there is a danger that line managers will flounder and inconsistent HR practice will
result or local HR managers will continue to rely on the central HR unit (45). Considerable investment is
therefore needed in training line managers and local HR managers so that they understand their responsibilities and feel confident in carrying them out. Second, experience in the UK suggests that HR managers may be reluctant to abandon the familiarity of their traditional roles. Devolution can also foster
tensions with line managers and with the central personnel department (81). Finally line managers although supportive of devolution in principle may be reluctant to take on additional people management
responsibilities because of their existing workload and because they may be uncertain whether they will
get sufficient training and support (82). The pros and cons of devolution are summarised in appendix 12.
Many of these issues revolve around local HR activity, but are the same considerations appropriate at
central level within the Ministry of Health? The emerging consensus is that it is crucial to have a specialist central HR capacity at Ministry level and that the central HR unit should have: an information and
monitoring role in terms of developing an HR information system that includes collecting and analysing
information about the reform process; a policy role in terms of developing an appropriate regulatory
framework for health staff in liaison with other public bodies; and an advisory and guidance role in
terms of providing technical assistance on HR issues and providing support for cultural change (36, 83).
Delivering specialist services
Outsourcing HR. It has been assumed that there will be a specialist in-house service to deliver HR
activity, but the increased use of outsourcing is a well-documented development (84) and in the health
sector it has been reported in industrial countries and to some degree in India, Mexico, Papua New
Guinea, South Africa, Thailand and Zimbabwe (85). The question arises at to whether HR activity should
also be outsourced. The arguments in favour are that it allows the organisation to buy in particular
specialist expertise, removes time-consuming activities from managers allowing them to focus on key
core activities and may provide a better service at lower cost (86). To be set alongside these advantages
are considerable disadvantages. First, the health sector is distinct from many other industries in terms of
the complexity and interdependence of delivering effective health care. Best practice therefore indicates
the importance of integration rather than fragmentation (87). The danger of outsourcing is therefore that
a substantial proportion of HR activity is crucial to the organisations strategy and culture and therefore
it should be provided internally (88). Moreover, outsourcing often provokes strong resistance from staff,
for example in the Philippines (89), and it may not be worth antagonising staff over this issue when more
important changes are in the pipeline.
Second, outsourcing assumes that suitable suppliers of such services exist. In many industrialised countries this is not the case with the market fragmented between providers that specialise in particular areas
like training, job evaluation etc and which may have no particular expertise in the health sector. The
unavailability of suitable providers is likely to be a major limitation in many developing countries.
Although multi-national companies are extending their reach, contracting out can also be prone to problems of poor service specification and corruption (90).
A number of alternatives are available which can bring market discipline and expertise into the organisa-
13
tion without making use of full outsourcing. With the growth in contracting mechanisms within health
care via purchaser/provider splits, the same type of mechanism can be applied to the personnel service.
HR can act as business unit or trading division within the Ministry of health or at lower tiers (for example, an individual hospital) and can sell agreed services at an agreed specification level (for example, job
adverts will be placed within 48 hours) to their customers. The advantages of such an arrangement are
that it clarifies objectives and outcomes, but it also incorporates some of the disadvantages of contract
mechanisms; especially the difficulties and costs of specifying contract levels.
Measuring HR effectiveness. Irrespective of which approach is adopted it is crucial that the effectiveness of the HR department is measured and audited. There are three broad approaches:
1. Quantitative or hard measures, i.e. numerical measures of inputs, outputs and outcomes [see appendix 13 and 14 (91)].
2. Qualitative or soft measures which provide information on staff attitudes and line managers views of
HR via surveys and focus groups.
3. Process analysis which can trace a process through its various stages (e.g. recruitment and selection)
to gauge its effectiveness.
HR can also ensure that its performance is effective by benchmarking its practice against other organisations and using the balanced score card approach discussed earlier.
A WHO sponsored initiative has developed key HR indicators for the health sector (for details see 92).
The key message of the WHO research is that if HR indicators are to be accepted and used effectively
they must form part of a broader process of cultural change and management development. Unless these
pre-conditions are satisfied, the scope to highlight outlier values and make comparisons between organisational units will be undermined.
Conclusion
In the last decade there has been much more attention paid to health care reform and the relative merits
of different health systems (93). The argument of this paper is that diverse attempts at health care reform
have been hampered by the insufficient attention that has been given to human resource management
(HRM) issues. Policy makers have been overly optimistic in their expectation that once plans for reform
have been devised, the process of implementation will be relatively straightforward. This has led to
insufficient attention being given to building support for reforms amongst the workforce and other key
stakeholders, developing the leadership skills and competencies needed to implement complex reforms,
and establishing realistic timetables for implementation.
There is clearly a long way to go in developing effective HR capability in the health sector.
More positively, however, there is an increasing commitment to take such steps and because the health
sector starts from a relatively low base line in HR terms, a variety of measures in areas such as recruitment and selection could make a substantial difference to the working lives of staff and the effectiveness
of health systems. Nonetheless, even simple measures will be more effective if they are based on a sound
evidence base that critically appraises both the successes and failures of recent attempts to strengthen
HR capacity in the health sector.
14
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21
Implications for HR
Altered role of the state: increased use of marketstyle incentives and private sector involvement
in provision and funding
22
Implications for HR
23
Policy area
Policy choice/practice
Business and customer (internal and external) needs are main referent
Search for excellence, quality and continuous improvement are
dominant values
Aim to go beyond contract; high levels of trust and commitment
HRM is central to business strategy
Managerial role
Top managers are highly visible leaders that set the mission and
values of the organisation
Line managers encourage and facilitate change by harnessing cooperation of employees and developing them accordingly
Managers own and are committed to the HR strategy
Organisation design
HR Policies
Numerical flexibility, i.e. core and periphery workforce Time flexibility e.g. annual hours
Selection emphasis on attitudes as well as skills
Appraisal open and participative two-way feedback
Training- learning and development of employees are key
Participation extensive use of two way communication
Rewards individual and group performance rewarded
Integrated HR policies ensure external and internal fit
24
Semi-skilled high
service quality
Semi-autonomous
regenerative
Work patterns
Rigid, traditional
Neighbourhood units;
resident assistance
Worker input
Discouraged
Welcomed
Information shared
Little to none
Most
Virtually all
Supervision and
control
Co-ordination; resident
choice
Assumptions about
workers
Theory X
Theory Y
Community members
Ten + residents
Seven to nine
Five to seven
Wages
$5.50 +
$7.00 +
$6.50 +
Turnover, annual
More than 80 %
30-80 %
20-40 %
Career paths
Little or none
Ownership/reimbursement
Labour relations
Mostly non-union
Mixed
Cost structure
Low to average
Average to high
Average to high
Philosophy of care
Medical-custodial
Medical-rehabilitative
Regenerative
25
1.
Public hospitals should be available for everyone, especially for unprotected patients, and they must
be suited to the needs of the disabled.
2.
Hospitals guarantee high quality health care, focusing especially on pain relief.
3.
Patients should be fully and faithfully informed about the disease and planned diagnostic and therapeutic procedures. The patient is deeply involved in decision making.
4.
Medical procedures can be carried out only after the patients informed consent.
5.
Special informed consent is required for patients involved in biomedical research, organ donation
and any use of human body products.
6.
The patient is entitled to be discharged from the hospital on his /her own responsibility.
7.
The patient should be handled with respect, including respect for privacy.
8.
9.
Free access to any information from the patients record will be provided, but should be made
available through the general practitioner.
10. The hospitalised patient is allowed to make any comment on the health care and the reception by the
hospital.
Source: Geschwind, H. 1999: 360 (42)
26
Afterthought/add on
Integration
Isolated
27
1.
The NHS will provide a universal service for all based on clinical need, not ability to pay.
2.
3.
The NHS will shape its services around the needs and preferences of individual patients, families
and their carers.
4.
5.
The NHS will work continuously to improve quality services and to minimise errors.
6.
7.
8.
The NHS will work together with others to ensure a seamless service for patients.
9.
The NHS will keep people healthy and work to reduce health inequalities.
10. The NHS will respect the confidentiality of individual patients and provide open access to information about services, treatment and performance.
* Reproduced in full
Source: Department of Health 2000: 3-4 (54)
28
Research-based
Strategy-based
Description
Competencies based
upon behavioural research on high performance executives
Competencies forecast
to be strategically important based upon anticipated future
Competencies based
formally or informally
upon organizational
norms/cultural values
Processes used
Competencies validated
by capturing behaviour
of high performance
managers or via interviews/focus groups
Advantages
Grounded in actual
behaviour
Competencies based
upon future not past
Air of legitimacy
Focuses managers on
learning new skills
Managerial sense of
ownership
Competencies based
upon speculation instead of actual behaviour
Disadvantages
Requires considerable
financial and HR investment
Values-based
29
30
Old myths
New realities
HR departments are not designed to provide corporate therapy. HR professionals must create the
practices that make employees more competitive,
not more comfortable.
The HR function does not own compliance managers do. HR practices do not exist to make employees happy but to help them become committed. HR professionals must help managers commit employees and administer policies.
HR is full of fads.
HR is HRs job.
31
Role
Metaphor
Activity
Management of strategic HR
Executing strategy
Strategic partner
Management of firm
infrastructure
Building an efficient
infrastructure
Administrative expert
Increasing employee
commitment and capability
Employee champion
Change agent
32
Pros
Cons
33
Hard
Recruitment and selection
Overall HR management
Soft
Internal customer satisfaction
34
35